‘Mutual recognition’ scheme was favoured by many UK financial organisations but could now be off the table

European companies are set to be braced for the worst if Brussels does not show flexibility to the City

If the EU does not allow UK funds to be sold to Europe, the UK will not allow EU funds to be sold into the UK

At the moment, more than 7,000 EEA funds are eligible to sell their products to British retail savers and institutional investors

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Theresa May has come under fire from Brexiteers over her 'soft' Brexit planCredit: Reuters

Former Brexit minister Steve Baker – who resigned in protest at the Chequers deal – said: “These hysterics are a tragic failure of leadership. The British public had the courage to vote Leave despite just such warnings - warnings which were proven to be wrong.

The task before every minister today is to find the guts to get on with it, not the excuse to capitulate.”

After just two weeks of peace, a new Cabinet row has erupted over how to handle no deal preparations in public.

The PM’s top table agreed to step up open preparations for the worst case scenario in a bid to crank up pressure on stalling EU negotiatiors. But Brexiteer ministers fear the move has already been hijacked by Remain-leaning ministers.

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Foreign Secretary Jeremy Hunt will visit France and Austria in a bid to publicise the Prime Minister's Brexit planCredit: AFP

It also emerged yesterday that a No10 pledge to push out 70 no deal preparation guides has been delayed as several ministries’ plans are not ready yet. The three departments most affected by Brexit, BEIS, DEFRA, and the HMRC, are all accused of dragging their feet.

Mr Baker added: “This is a damaging delay we can ill afford. The Government should get on with releasing these papers as soon as they are ready so people and businesses can see the sober and accurate facts of the Government’s preparedness.”

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Jeremy Hunt warned last night: “I will be explaining to my counterparts that it is time for the EU to engage with our proposals, or we potentially face the prospect of a no-deal by accident”.

The government was also blasted last night for “leaving a vacuum” on immigration policy after Brexit by failing to set out any options for two years on from the referendum.

The Commons Home Affairs Select Committee warned the key issue now “risks being caught up in a rushed and highly politicised debate” in the run up to our EU exit next March, its MPs said.

British negotiators have told the EU that 7,000 European-based financial funds that rely on British clients will also be hit unless Brussels soften its tough line on City access. Stepping up the ante, London has warned that is regulators would be forced to retaliate by closing down UK money to retaliate.

Theresa May defends stockpiling medicines and blood for Brexit saying she's being ‘sensible’